OIDAR Stands for Online Information Database Access and Retrieval services
is a category of services provided through the medium of internet and received by the recipient online without having any physical interface with the supplier of such services. E.g. downloading of an e-book online for a payment would amount to receipt of OIDAR services by the consumer downloading the e-book and making payment.
Following are the examples
(i) advertising on the internet;
(ii) providing cloud services;
(iii) provision of e-books, movie, music, software and other
intangibles through telecommunication networks or internet;
(iv) providing data or information, retrievable or otherwise, to
any person in electronic form through a computer network;
(v) online supplies of digital content (movies, television shows,
music and the like);
(vi) digital data storage; and
(vii) online gaming;
How would OIDAR services be taxable under GST?
Place of supply here is very important for arriving at taxability
- In case, both the supplier of OIDAR Service and the recipient of such service is in India, the place of supply would be the location of the recipient of service
- in cases where the supplier of service is located outside India and the recipient is located in India. In such cases also the place of supply would be India
Who will be responsible for paying the tax?
- In cases where the supplier of such service is located outside India and the recipient is a business entity (registered person) located in India, the reverse charge mechanism would get triggered and the recipient in India who is a registered entity under GST will be liable to pay GST under reverse charge and undertake necessary compliances.
- if the supplier is located outside India and the recipient in India is an individual consumer( Not registered under GST ). In such cases also the place of supply would be India and the transaction is amenable to levy of GST, but the problem would be, how such tax would be collected. It would be impractical to ask the individual in India to register and undertake the necessary compliances under GST for a one off purchase on the internet.
How would the entity located outside India comply with the responsibilities entrusted under GST?
The supplier (or intermediary) of online information and database access or retrieval services shall, for payment of integrated tax,take a single registration under the Simplified Registration Scheme in Form GST REG-10. The supplier shall take registration at Principal Commissioner of Central Tax, Bengaluru West who has been the designated for grant registration in such cases.
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